Contact: Paul Carey-Kent, Deputy Treasurer 01962 847525

David Howells, Director of Corporate Services 023 8064 4000 ext 203

1. Introduction

1.1 This report sets out for members the latest budget predictions for the year. Overall an underspending of £1,568,000 against the original budget is predicted. This is an increase of £800,000 against the last reported projected underspend of £768,000 the main reason for which is pensions. An underspend was expected when the last monitoring report was presented but now it is more confidently predicted. The reasons for this underspend and other variations are set out in the following paragraphs.

1.2 This level of underspend would cover the repayment of the £787,000 transitional grant in 2006/07 and leave a further underspend estimated at £780,000 which could be used to establish a reserve for capital payments in future years. This proposal is examined further in the draft budget report elsewhere on the agenda.

2. Revenue

2.1 Details of the latest position are given in Appendix A. The main variations compared with the previous monitoring report are as follows:

Retained firefighters pay and allowances (£19,000)

2.2 £25,000 was allocated to meet the cost of a recruitment campaign targeted at retained firefighters. This was a new initiative requiring recruitment and training of volunteer outreach workers. As a result the initiative only became operational late in the Summer and this resulted in an underspend of £19,000. Otherwise retained firefighters pay continues to be roughly on or just below budget if incidents to the end of the year are at budget. (15,800 incidents at November 2004 against 16,496 budget).

Non-uniformed pay (+£115,000)

2.3 The increase in the projected outturn is due to changes in establishment and vacant posts being filled. This budget head is still £85,000 below the original budget.

Other employee expenses (-£5,000)

2.4 This projected underspend relates to the relocation expenses for retained firefighters.

Utilities, rents and rates (-£15,000)

2.5 There are increased savings in business rates of £36,000 due to property revaluations offset by the estimated cost of rent reviews.

Other supplies (-£4,000)

2.6 Estimated savings of £4,000 are predicted on publicity and catering expenses related to staff recruitment.

Income (-£197,000)

2.7 Additional work at the workshops leads to more income totalling £47,000 from fitting out of vehicles.

2.8 More favourable cash flow than originally forecast now results in the interest receivable budget increasing by £150,000.

Asset Management (-£122,000)

2.9 Fewer loans have been taken out to date than predicted results in £122,000 less interest being payable than originally budgeted

3. Pensions (-£552,000)

3.1 The sharp drop in lump sum payments (-£385,000) is due to a combination of fewer and different people retiring than assumed coupled with more opting not to commute the maximum as a lump sum than has been the case in the past.

3.2 Pension payments are lower than originally estimated (-277,000) due to the knock-on effect of fewer retirements this year and last.

4. Capital

4.1 There are no changes to report against the updated programme presented to the Authority last month.

5. European Convention on Human Rights and the Human Rights Act 1998

5.1 The proposals within this report are considered compatible with the provisions of the European Convention on Human Rights, the Human Rights Act 1998 and the Race Relations (amendment) Act 2000.

Recommendation

1. That the latest budget position be noted.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

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